Shares in European wind power companies plummeted on Tuesday following U.S. President Donald Trump’s suspension of offshore wind leasing on his first day in office. This decision adds to the challenges faced by an industry that had looked to the U.S. for revival amidst ongoing struggles.
Key Highlights:
Industry Struggles:
The global offshore wind sector has faced significant hurdles, including:
Escalating Costs: Increasing expenses have strained project budgets.
Supply Chain Issues: Disruptions have delayed projects.
Planning Delays: Regulatory hurdles have led to cancellations.
Trump’s Executive Order:
Trump ordered a halt on new federal offshore wind leasing pending an environmental and economic review. He criticized wind turbines as “ugly,” “expensive,” and harmful to wildlife.
Impact on Companies:
Orsted: Denmark’s Orsted saw a 17% drop in shares, taking a $1.69 billion impairment charge on U.S. projects. Analysts cited delays and higher costs for the Sunrise Wind project as significant factors.
Other companies experienced declines:
EDP Renovaveis: Down 1.6%
RWE: Fell 0.5%
Equinor: Dropped 2.2%
Vestas: Fell nearly 3%
Prysmian’s Decision:
Italy’s Prysmian announced it would abandon plans to build a U.S. plant for offshore wind cables, seeing a 1% drop in shares after closing at a record high.
Nuclear Sector Rally:
In contrast, stocks in nuclear companies surged due to Trump’s support for expanding power supplies. U.S.-based uranium miners and nuclear utility companies saw gains between 4% and 8%.
Risk to Existing Projects:
The U.S. currently has about 2.4 gigawatts of offshore wind developments underway, which are not expected to be affected by the executive order. However, the review process poses risks for developers of existing projects.
Industry Response:
The American Clean Power Association expressed strong opposition to Trump’s order, warning that restricting wind development would lead to increased consumer energy bills in states that rely heavily on wind power.